Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Investor Presentation (June 2015)
33 slides from Avis Budget's investor presentation, June 2015
Slide 1: Presentation to Investors June 2015
Presentation to Investors June 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements about future results made in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include projections. These statements are based on current expectatio
Slide 3: Key Messages
Key Messages The Business Today Market Dynamics Global Performance Drivers Projected Earnings Growth 3
Slide 4: A Global Leader in the Car Rental Industry
A Global Leader in the Car Rental Industry 140 million 10,000 rental days locations $8 billion annual revenue 35 million 545,000 transactions vehicles 4
Slide 5: Diversified Revenue Sources
Diversified Revenue Sources Commercial vs. On-Airport vs. Americas vs. Avis vs. Budget Leisure Off-Airport International 65% 30% 45% 55% 70% 30% 70% 30% Zipcar Locations in more than 175 countries and a leading position in most major markets 5
Slide 6: We Have a Highly Variable Cost Structure
We Have a Highly Variable Cost Structure . . . Direct Operating 75% 25% Costs Fleet Costs 100% Variable Fixed 75% 25% SG&A Costs 75% 25% Variable Costs Fixed Costs 6
Slide 7: So Pricing Has the Largest Impact on Margins
. . . So Pricing Has the Largest Impact on Margins Adjusted EBITDA Impact of a 1% Change in Driver ($ in millions) $49 $14 $23 $22 $7 $19 $35 $6 $5 $16 $16 $14 Average Daily Rental Utilization Per-unit Rate Days Fleet Costs Americas International 7
Slide 8: Substantial Profit Growth
Substantial Profit Growth Adjusted EBITDA ($ in millions) $876 +21% CAGR 10.3% $410 Margin 7.9% Margin 2010 2014 Significant margin improvement 8
Slide 9: Free Cash Flow of $1.4 Billion over Last Three Years
Free Cash Flow of $1.4 Billion over Last Three Years ($ in millions) $457 $158 $260 ($471) $1,434 $1,198 ($168) (a) Pretax Income Working capital Vehicle Non-vehicle Capital Tax Free Cash and other programs depreciation & expenditures payments Flow amortization (c) Data are cumulative for years 2012
Slide 10: Key Messages
Key Messages The Business Today Market Dynamics Global Performance Drivers Projected Earnings Growth 10
Slide 11: Well-Positioned for Future Growth
Well-Positioned for Future Growth Americas Revenue to be driven by volume growth and increased pricing International Poised to benefit from economic recovery and continued integration Zipcar Targeting organic membership and revenue growth, incremental synergy benefits and expansion 11
Slide 12: Upside Potential for Car Rental Pricing
Upside Potential for Car Rental Pricing . . . A Typical Family Vacation Attractions Airfare 23% 21% Car Rental is the smallest cost Car of the trip 5% Rental 25% Lodging 26% Meals Nobody would alter their trip because the price of the car rental went up by $1 a day 12
Slide 13: And Pricing Has Been Improving
. . . And Pricing Has Been Improving Average Daily Rate (a) $41.62 $39.80 +5% 2012 2014 Meaningful change in realized pricing Note: Figures in constant currency (a) U.S. excluding Zipcar and Payless 13
Slide 14: Key Messages
Key Messages The Business Today Market Dynamics Global Performance Drivers Projected Earnings Growth 14
Slide 15: Strategic Plan
Strategic Plan Driving Sustained, Profitable Growth Drive Strategically Expand Our Put the Efficiency Accelerate Global Customer Throughout Growth Footprint First the Organization 15
Slide 16: Delivering Higher Revenue per Transaction
Delivering Higher Revenue per Transaction Higher Revenue per Transaction International Inbound(a) +83% Small Business(b) +24% Specialty & Premium Fleet(c) +54% Ancillary Revenue(d) +76% Note: Data are 2014 results for North America excluding Payless and Zipcar (a) Compared to all non-inbound transac
Slide 17: Expanding our Global Footprint
Expanding our Global Footprint New Markets The Avis Europe transaction reunited our world-class brands globally, and Zipcar is the worldwide leader in car sharing Budget Licensees Acquisitions of Southern California, Edmonton and Scandinavia will drive significant revenue and cost synergies Addition
Slide 18: Zipcar Meets Emerging Consumer Needs
Zipcar Meets Emerging Consumer Needs Zipcar operates the largest member-based, car sharing network in the world – More than 470 cities and towns and 425 college campuses – 930,000 members Locations in the United States, Canada and Europe Growth opportunities in existing markets, from new services an
Slide 19: Diversifying Disposal Channels to Reduce Fleet Costs
Diversifying Disposal Channels to Reduce Fleet Costs Alternative Disposal Channel Benefits Expanding dealer-direct sales TBD $400 80% more risk-car sales completed via $250 alternative channels in 2014 $0 Traditional Online Direct-to- Direct-to- Auction Auction(a) Dealer Consumer Our combined direct
Slide 20: Organizational Efficiencies Delivering Significant Benefits
Organizational Efficiencies Delivering Significant Benefits Yield Performance Global Acquisition Management Excellence Effectiveness Integration Targeted pricing Organization-wide Leveraging global Europe strategies process scale of our improvement organization Zipcar Integrate demand, fleet Fleet T
Slide 21: Key Messages
Key Messages The Business Today Market Dynamics Global Performance Drivers Projected Earnings Growth 21
Slide 22: We Expect Revenue to Increase Approximately 4% in 2015
We Expect Revenue to Increase Approximately 4% in 2015 Revenue ($ in millions) $8,800 $8,485 2014 2015E Americas pricing is expected to increase 1-2% in 2015(a) (a) Excluding currency effects 22
Slide 23: We Expect Fleet Costs Will Remain Manageable
We Expect Fleet Costs Will Remain Manageable LTM Monthly Per-Unit Fleet Costs Americas $360 $346 $312 $323 2015E $310 $310-$320 Average $261 $290 $296 $233 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015E 2015E Changes in per-unit fleet costs are expect
Slide 24: 2015 Outlook
2015 Outlook ($ in millions, except EPS) (a) 2015 Estimate Growth vs. 2014(b) Revenue $8,800 +4% Adjusted EBITDA $900 – $1,000 +8% Pretax income $535 – $635 +13% Net income $335 – $400 +12% Diluted EPS $3.15 – $3.75 +17% (a) As of May 4, 2015; excludes certain items such as acquisition-related costs
Slide 25: Significant Free Cash Flow
Significant Free Cash Flow ($ in millions) 2015E Adjusted EBITDA $900 – $1,000 Corporate interest (200) Capital expenditures (200) Cash taxes (50) – (75) Working capital, vehicle 0 programs and other Free Cash Flow $450 - $525 Expect free cash flow of approximately $450 to $525 million in 2015(a) (a
Slide 26: Planned Uses of Free Cash Flow in 2015
Planned Uses of Free Cash Flow in 2015 Share repurchases (a) – Expect to exhaust remaining $285 million of share repurchase authorization in 2015 Tuck-in acquisition targets: – Avis Budget Group licensees in or near where we operate corporately – Independent operators outside the United States Mix w
Slide 27: Key Messages
Key Messages Strong Performance Strong financial performance Focused Focused on profitable growth Global Multiple opportunities to grow globally Opportunities Generating significant earnings Profitable and free cash flow 27
Slide 28: Appendix
Appendix
Slide 29: Strong Earnings Growth Drives a Reduction in Leverage
Strong Earnings Growth Drives a Reduction in Leverage LTM Net Corporate Leverage(a) 3.6x 3.4x 3.3x First Quarter First Quarter First Quarter 2013 2014 2015 Target net leverage of 3 to 4 times Adjusted EBITDA (a) Net corporate debt divided by Adjusted EBITDA excluding certain items A-2 29
Slide 30: No Corporate Debt Maturities Until 2017
No Corporate Debt Maturities Until 2017 (a) Corporate Debt Maturities (in millions) (b) $977 $675 €450 $550 $400 $375 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Senior Notes Term Loan (a) As of April 30, 2015 A-3 (b) $600 million swapped to fixed rates 30
Slide 31: Glossary
Glossary This presentation includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. We have provided below reasons we present these non- GAAP financial measures, a description of what they represent and a reconciliation to the most comparabl
Slide 32: Glossary
Glossary Reconciliation of Net Corporate Debt (in millions): Year Ended December 31, 2009 2010 2011 2012 2013 2014 Net corporate debt $ 1,649 $ 1,591 $ 2,671 $ 2,299 $ 2,701 $ 2,796 Plus: Cash and cash equiv alents 482 911 534 606 693 624 Corporate debt $ 2,131 $ 2,502 $ 3,205 $ 2,905 $ 3,394 $ 3,42
Slide 33: Avis Budget Group
avis budget group
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